A consortium of think-tank analysts believe it has the answer to addressing the retirement crisis facing the 75 million Americans whose companies for not offer 401(k) type plans: the automatic IRA. Analysts from The Brookings Institution and The Heritage Foundation have encouraged the bill, which is expected to be introduced in Congress within the next few weeks, but would like to delay its introduction in order to help build support among small business owners, according to The Chicago Tribune. Roughly half of American employees have no 401(k) option. That’s because, for small businesses especially, the plans can be expensive to administer. The IRA, conversely, would allow approved employers with at least 10 employees to deduct from employee’s paychecks, and even select the investment options for employees. Employees could then choose different funds or withdraw. Employers would not be burdened with the costs of administration, or matching programs. Employees’ relationships would be directly with the banks managing the IRA. “It’s like letting your employees set up direct-deposit with their paychecks,” said J. Mark Iwry, a Brookings fellow.   For employees, IRAs allow fewer saving. The maximum contribution for those under 50 is $4,000 per year, compared to $15,500 for 401(k)s.   Still, experts agree something is better than nothing, and nothing is what most small business workers have put aside for retirement so far.   According to the Congressional Research Service, only 24% of people without 401(k) or other employer-sponsored retirement plans have IRAs.   The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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